The BOE minutes showed a unanimous agreement in raising interest rates further. We could see rates at 5.75% before August, and this could fuel the sterling to new highs and back up above $2, on the back of carry trades, where sterling is a hot favourite. The BOJ still holds rate at 0.5% and attracts a lot of borrowers who look to invest in high yielding sterling assets.
Elsewhere,Munich-based Ifo Institute's index of business sentiment will climb to 108.8 in May, the highest since records for a reunified Germany began in 1991, according to a Bloomberg News survey of 37 economists. This couldbe a major boost for EUR, and would set the terms for further rate hike in the Euroland.
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